Reinhardt Thread - "Suggestions and Predictions"

Originally posted by Maya00a
Pretending to fail again? You know what really worries me is that I'm not sure which scenario I prefer - either that we're being manipulated and
someone actually has a grip on the situation or that there's no manipulation and everyone in charge is actually clueless as to what to do to fix this
mess.

well, you know which you believe to be the case don't you?

they created the problem (& the major one about to come), everyone will have their reaction...

then wait till you see their 'solution'

If everyone gets panicked enough then people will beg them for the 'solution' and that frightens me the most.

From Florida golf clubs through Long Island's playground of the rich and famous, all the way to the City of London's boardrooms, investors large
and small are reaching to check their wallets, scared they may have become victims of Wall Street's biggest fraud. Many wealthy clients face
financial ruin following the arrest of 70-year-old Bernard Madoff, a Wall Street grandee and one of its most respected and well-connected money
managers, on charges of operating a $50bn (£33.5bn) investment scam. Many more expect to emerge with substantial losses and beetroot faces.

If Mr Madoff's estimate of $50bn in losses turns out to be correct, the scam will dwarf anything carried out by the eponymous Charles Ponzi in
the 1920s. It would be more than four times larger than the fraud which brought down WorldCom, the telecoms giant, in 2002, the biggest
bankruptcy in US history. It is not known yet just how many years the trader may have been cooking his books, but it might also end up as one of the
longest to have gone undetected.

Perfect example of pretending to fail and planning the legislative response!!

The stunning fraud Wall Street pillar Bernard Madoff is accused of has raised questions about whether federal regulators were lax in failing to
scrutinize his operations and respond to alarms raised about them.

The SEC's Boston office has been accused in the past of brushing off a whistleblower's legitimate complaints, in a case that brought the
resignation of the head of that unit in 2003. Markopolos's intervention was first reported in Friday's editions of The Wall Street Journal.

"There's no question the SEC had the authority to investigate fraud" in the investment adviser part of Madoff's business as well as the
securities operation, William Galvin, Massachusetts' secretary of state and its top securities regulator, said in a telephone interview Friday.
Galvin, like other state regulators, has been pushing for tighter government supervision of hedge funds, vast pools of capital holding an estimated
$2.5 trillion in assets that are opaque, scantly regulated and partly blamed for the global financial crisis.

The SEC said it appeared that virtually all of the assets of his hedge fund business were missing.

We have flashpoints erupting as we speak, in places we think we are isolated from but which in the end may be the destruction of a good portion of
this planet for many.

I have spoken with refugees from Ivory coast, Ghana, Nigeria as well as befriended persons from Ethiopia, Sudan and Somalia.

The conflicts are stunning as it seems we have bands of 12 to 30 year old men holding portions of city scapes under control to the extent that the
local police will not interupt necklacing or local gang or tribe justice.

The breakdown of the family groups in Africa is stunning as well. Many have no parents, no school, no food and have no chioce but to live in a brute
gang organization. Kill or be killed.

The fact that they allow it to take place, that is, mob justice, in many parts of Africa results in the above set of refugees in Canada. And we are
just seeing the early part of the migration that is pushing toward the West.

The most alarming fact is that many Western countries such as France (Ivory Coast..African West Coast) are pulling out of the area and leaving it as
hopeless.

Britain is trying to help out somewhat as is the US in Africa but I hear that many see it as lost as we are having our own issues.

Now we have riots in Greece. My daughter just left Greece and Turkey not more then a year ago. It was more or less safe and now we have a huge
flashpoint that could carry on throughout Europe.

Russia seems to be fairly stable but they do have some issues.

South America has huge slums with an alarming rate of gangs trying to control portions of the country.

Mexico is almost under control of the druglords.

And now in America we have people calling for reform of the most alarming type complete with AK47's.

The video tried to put forth the idea that we are undergoing an economic change unseen since the Industrial Revoloution so now may be a good time to
reread Dickens. lol

The question I have is how do we prosper during this time of unsettlement.

R seems to have some ideas yet if the bottom falls all out altogether what will we have to work with?

The Catholic Church, with all of its faults, is still the longest standing social/political organization on the planet and it may be wise to support
the agenda while making a profit from whatever bridge building they may be doing.

Remember the alternative........the organization which is having a positive effect on these third world nations is Islam. And from a political point
of view they are winning at the moment both in Europe and in Africa.

I will never forget listening to the BBC program Hard Talk with guest Baer saying that Bush had lost the war. This was back near the beginning of
September.

As the world slips into recession, it is also on the brink of a synthetic CDO cataclysm that could actually save the global banking system.

It is a truly great irony that the world’s banks could end up being saved not by governments, but by the synthetic CDO time bomb that they set
ticking with their own questionable practices during the credit boom.

Alternatively, the triggering of default on the trillions of dollars worth of synthetic CDOs that were sold before 2007 could be a disaster that
tips the world from recession into depression. Nobody knows, but it won’t be a small event.

A synthetic CDO is a collateralised debt obligation that is based on credit default swaps rather than physical debt securities.

CDOs were invented by Michael Milken’s Drexel Burnham Lambert in the late 1980s as a way to bundle asset backed securities into tranches with
the same rating, so that investors could focus simply on the rating rather than the issuer of the bond.

About a decade later, a team working within JP Morgan Chase invented credit default swaps, which are contractual bets between two parties about
whether a third party will default on its debt. In 2000 these were made legal, and at the same time were prevented from being regulated, by the
Commodity Futures Modernization Act, which specifies that products offered by banking institutions could not be regulated as futures contracts.

This bill, by the way, was 11,000 pages long, was never debated by Congress and was signed into law by President Clinton a week after it was
passed. It lies at the root of America’s failure to regulate the debt derivatives that are now threatening the global economy.

Anyway, moving right along – some time after that an unknown bright spark within one of the investment banks came up with the idea of putting
CDOs and CDSs together to create the synthetic CDO.

Here’s how it works: a bank will set up a shelf company in Cayman Islands or somewhere with $2 of capital and shareholders other than the bank
itself. They are usually charities that could use a little cash, and when some nice banker in a suit shows up and offers them money to sign some
documents, they do.

That allows the so-called special purpose vehicle (SPV) to have “deniability”, as in “it’s nothing to do with us” – an idea the banks
would have picked up from the Godfather movies.

The bank then creates a CDS between itself and the SPV. Usually credit default swaps reference a single third party, but for the purpose of the
synthetic CDOs, they reference at least 100 companies.

The CDS contracts between the SPV can be $US500 million to $US1 billion, or sometimes more. They have a variety of twists and turns, but it
usually goes something like this: if seven of the 100 reference entities default, the SPV has to pay the bank a third of the money; if eight default,
it’s two-thirds; and if nine default, the whole amount is repayable.

For this, the bank agrees to pay the SPV 1 or 2 per cent per annum of the contracted sum.

Finally the SPV is taken along to Moody’s, Standard and Poor’s and Fitch’s and the ratings agencies sprinkle AAA magic dust upon it, and
transform it from a pumpkin into a splendid coach.

The bank’s sales people then hit the road to sell this SPV to investors. It’s presented as the bank’s product, and the sales staff pretend
that the bank is fully behind it, but of course it’s actually a $2 Cayman Islands company with one or two unknowing charities as shareholders.

It offers a highly-rated, investment-grade, fixed-interest product paying a 1 or 2 per cent premium. Those investors who bother to read the fine
print will see that they will lose some or all of their money if seven, eight or nine of a long list of apparently strong global corporations go
broke. In 2004-2006 it seemed money for jam. The companies listed would never go broke – it was unthinkable.

Here are some of the companies that are on all of the synthetic CDO reference lists: the three Icelandic banks, Lehman Brothers, Bear Stearns,
Freddie Mac, Fannie Mae, American Insurance Group, Ambac, MBIA, Countrywide Financial, Countrywide Home Loans, PMI, General Motors, Ford and a pretty
full retinue of US home builders.

In other words, the bankers who created the synthetic CDOs knew exactly what they were doing. These were not simply investment products created
out of thin air and designed to give their sales people something from which to earn fees – although they were that too.

They were specifically designed to protect the banks against default by the most leveraged companies in the world. And of course the banks knew
better than anyone else who they were.

As one part of the bank was furiously selling loans to these companies, another part was furiously selling insurance contracts against them
defaulting, to unsuspecting investors who were actually a bit like “Lloyds Names” – the 1500 or so individuals who back the London reinsurance
giant.

Except in this case very few of the “names” knew what they were buying. And nobody has any idea how many were sold, or with what total face
value.

It is known that some $2 billion was sold to charities and municipal councils in Australia, but that is just the tip of the iceberg in this
country. And Australia, of course, is the tiniest tip of the global iceberg of synthetic CDOs. The total undoubtedly runs into trillions of
dollars.

All the banks did it, not just Lehman Brothers which had the largest market share, and many of them seem to have invested in the things as well (a
bit like a dog eating its own vomit).

It is now getting very interesting. The three Icelandic banks have defaulted, as has Countrywide, Lehman and Bear Stearns. AIG has been taken over
by the US Government, which is counted as a part-default, and Freddie Mac and Fannie Mae are in “conservatorship”, which is also a part default
– a 'part default' does not count as a 'full default' in calculating the nine that would trigger the CDS liabilities.

Ambac, MBIA, PMI, General Motors, Ford and a lot of US home builders are teetering.

If the list of defaults – full and partial – gets to nine, then a mass transfer of money will take place from unsuspecting investors around
the world into the banking system. How much? Nobody knows, but it’s many trillions.

It will be the most colossal rights issue in the history of the world, all at once and non-renounceable. Actually, make that mandatory.

The distress among those who lose their money will be immense. It will be a real loss, not a theoretical paper loss. Cash will be transferred from
their own bank accounts into the issuing bank, via these Cayman Islands special purpose vehicles.

The repercussions on the losers and the economies in which they live, will be unpredictable but definitely huge. Councils will have to put up
rates to continue operating. Charities will go to the wall and be unable to continue helping those in need. Individual investors will lose
everything.

There will also be a tsunami of litigation, as dumbfounded investors try to get their money back, claiming to have been deceived by the sales
people who sold them the products. In Australia, some councils are already suing the now-defunct Lehman Brothers, and litigation funder, IMF
Australia, has been studying synthetic CDOs for nine months preparing for the storm.

But for the banks, it’s happy days. Suddenly, when the ninth reference entity tips over, they will be flooded with capital. It’s possible they
will have so much new capital, they won’t know what to do with it.

This is entirely uncharted territory so it’s impossible to know what will happen, but it is possible that the credit crunch will come to sudden
and complete end, like the passing of a tornado that has left devastation in its wake, along with an eerie silence.

He forgot to time in Christmas shopping with the timing of a major offense such as aka Tet offense....peasents need Christmas!

So this, to me is North and South Korea as we have almost "normalized" North Korea. All we need to do to tap the labour in North Korea is make it
more like South Korea.

We did this in Viet Nam. We pretended to lose the war...we never wanted to win...the war was a coverup for some economic/social changes funded part
by the CIA. We now control Viet Nam more now then we did at any point in history...by we i mean the West....and by that I mean the power behind the
west.

He did, but the problem I have with it is that no one can predict when a war will start (i.e. to the day etc), unless it is give or take a
month or so (I don't care how clued in he is)! A war is an incredible project-based operation and if it is timed, it will be timed for after the
debasement, and possibly after the public works are finished.

There is still a lot of corruption that can take place during the course of a public works project, from tendering to completion dates.

The February event will be very interesting - everything appears to be coming together to suggest a large scale event (socio-economic, political or
military).

I read somewhere that Pakistan will go bankrupt in Feb 2009 - a war may ration this, if anything, the books can be cooked and then burnt (if u know
what I mean)!

I wonder what the impact of a nuclear strike will do to all things economic, political and socially - maybe this will take the US into the PAK-IND war
(if that is the case), along with Europe's bloodthirsty pirates!

This content community relies on user-generated content from our member contributors. The opinions of our members are not those of site ownership who maintains strict editorial agnosticism and simply provides a collaborative venue for free expression.